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Marshmallows and Dalio's
Best thing I read in a while on macro-economics.
Have you heard of the marshmallow experiment (this is a funny version). I hadn’t actually heard of it until this year. Where a child is asked to pick between a smaller treat and a larger treat, but they have to earn the larger treat by staring at the smaller treat for some amount of time, and if they last the time, they get 2 times the smaller treat. It’s a test on delayed gratification, and with the belief that if you can delay gratification, you will be successful.
I have a feeling that Ray Dalio was good at the marshmallow test. He probably would have taken the 2 marshmallows he successfully got after the ten minutes, traded his marshmallows for a jar of honey, traded the jar of honey for a tennis racket, and then a tennis racket for a brick of gold. He would have taken that brick of gold. He would take that one brick of gold, leverage it 2-1, and then raise capital from outside investors. He would then diversify into a well balanced portfolio of Equity, Debt and Real Estate.
Ray Dalio is the founder of Bridgewater, a hedge fund that has continued to generate returns for decades.
I like people who think macro. Macro thinking takes a longer time frame into account. Ray Dalio has proven his macro thinking on a scale that is rare to find.
I enjoyed reading this post a lot, and I believe it could be one of the most valuable posts you can read on economics this year.
By Adam Draper
I ponder as a VC.
It's a quick one minute read to make you think, smile, or laugh.
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